4. Marketing concept according to general theory
4.1. Core concepts of marketing
Currently, there are many different definitions of marketing, each of which has some disadvantages, so there is no unified definition of marketing.
Marketing concepts of the American Marketing Association (AMA – America Marketing Associate):
- 1960: “Marketing is all business activities aimed at directing the flow of goods and services offered by suppliers towards consumers and users”. This concept is influenced by traditional marketing, which emphasizes the distribution and circulation of goods in an effort to sell what has been produced. This concept does not express the idea of “how to produce products that can be sold”.
- 1985: “Marketing is the process of planning and managing the pricing, promotion and distribution of ideas, goods and services to create transactions that satisfy individual objectives, individuals, organizations and society”. This concept clearly states that the products being exchanged are not limited to tangible goods but also include ideas, services, etc. Marketing does not only apply to business activities aimed at profit, clearly defining the function of marketing as not only selling or distributing goods. These views gradually approach the modern view of the function of marketing.
Marketing concept of the UK Chartered Institute Of Marketing: “Marketing is the process of organizing and managing all production and business activities from discovering the true needs of consumers for a product, specific product to the production and delivery of those goods to the final consumer to ensure the company earns the expected profits”.
This is a relatively complete concept, clearly demonstrating the steps in marketing, including finding demand, detecting demand, evaluating demand, determining production scale, producing goods, and distributing / selling. This concept generalizes marketing into a strategy, from market research to achieving expected profits.
Philip Kotler defines marketing: “Marketing is a social management process through which individuals and different groups of people receive what they need and want through creating, providing and exchanging products of value with others”.
This concept is presented by Philop Kotler in the form of a human philosophy and motto. Clearly identify the original idea of marketing as needs and desires, demonstrating the basic content of marketing as value exchange. This proves that marketing is necessary for everyone.
In general, marketing concepts are based on the following core issues: natural needs, wants, paid needs, products, benefits, costs, satisfaction, exchange, transaction, and market.
Figure 3: core concepts of marketing
4.2. Analyze core concepts of marketing
4.2.1. Needs
Natural need is a feeling of lack of something that humans feel. Human’s natural needs are often very diverse and complex, specifically:
- Basic physiological needs (eating, sleeping, toileting, …).
- Social needs (relationships, affection, emotions, …).
- Personal needs (knowledge, self-expression, …)
The above needs are a primitive part of human nature, not created by society or marketers. If these needs are not satisfied, people will feel miserable and unhappy. In this case, people will choose one of two solutions: either find an object capable of solving natural needs, or try to control and eliminate it.
4.2.2. Wants
Desire is a natural need but is shared by human knowledge, culture and personalities. Natural needs and desires are inversely proportional to each other, needs are few but desires are many. Human desires are constantly evolving and are shaped by forces (business, religion, school, family, etc.) and social institutions.
4.2.3. Demands with ability to pay (Demands)
Affordable needs are desires to obtain specific products and services with the additional condition of being able and willing to pay to own or experience those products and services. Businesses not only quantify how many people want their product, but more importantly, quantify how many people are actually willing and able to buy it.
Basically, marketers do not create demand, the need already exists.
Along with other influencing factors in society, marketers influence needs and wants by creating products that are appropriate, easy to find, attractive and affordable for target customers. their spending. The more a product satisfies the wants and needs of target customers, the more successful the marketer will be.
4.2.4. Product
People’s natural needs, wants and needs will suggest the product. A product in marketing is understood as a set of elements and attributes that satisfy the needs and desires of consumers, bring them desired values (benefits) and for which consumers buy it.
4.2.5. Satisfaction, benefits (value) and costs
The level of consumer satisfaction depends on the comparison between the benefits (value) they receive when using the product with the cost they have to spend to obtain that product. Benefits are usually of two types: basic benefits and additional benefits. Let’s temporarily imagine the following example:
When a customer comes to a business to make a purchase, the basic benefits they will definitely receive may include:
- Product benefits: good product.
- Service benefits: dedicated service.
- Human benefits: happy employees, bringing a sense of comfort.
- Brand benefits: using famous brand products helps enhance your self-worth.
Customers will have the behavior of converting these benefits into a value that can be clearly measured in numbers, specifically money.
But in addition to those basic benefits, customers also receive other additional benefits that they (probably) will not realize, such as:
- Money costs: buying good products will reduce repair and maintenance costs.
- Time and energy: you don’t have to waste time and effort going elsewhere to choose another product (of the same type) because you have already bought a satisfactory product.
- Morale: very good service and staff bring a comfortable feeling, help good spirit, can do many other things well.
Adding the two types of benefits together, this is the total benefit that customers receive. But usually, customers only realize that they receive basic benefits; a very few customers realize that they receive additional benefits.
The task of businesses in general and marketers in particular is to help customers know that for the same amount of money spent, they not only receive the basic, clear immediate benefits, but they also receive additional benefits later. This helps customers feel like they are getting more for the money they spend on the product.
The level of consumer satisfaction also depends on the comparison between the actual consumption value they receive and the value they expect. Those expectations are often formed from previous purchasing experiences, through word of mouth, promises from sellers or information from competitors. There are 3 levels of satisfaction compared to expectations:
- Customers are dissatisfied if the actual results are worse than what they expected.
- Customers are satisfied if the results are commensurate with expectations.
- Customers are very satisfied if the results exceed expectations.
Marketers can influence and even change buyers’ expectations. Reasonable marketing solutions are to increase customer expectations while ensuring product features match those expectations.
4.2.6. Exchange and trade
Exchange is one of four ways (self-production, appropriation, begging, exchange) for people to receive the products they want. Exchange is the act of receiving a desired product from another object by offering something in return that is commensurate or acceptable to the other person. Exchange is the core concept that gives birth to marketing.
Voluntary exchange only occurs when:
- Each side has something that may be of value to the other side.
- Each party has communication and distribution capabilities.
- Each party is free to accept or refuse the exchange.
- Each side believes it is necessary and beneficial to exchange with the other side.
If two parties committed to exchange have negotiated and reached an agreement, then we say that a transaction (business transaction) has occurred. Transaction is the basic unit of exchange.
A business transaction is a trade of values between two parties, involving at least two valuable objects, agreed terms, a suitable time, a suitable place. Usually, there is a legal system that arises to support and bind the transaction parties to comply with their commitments.
4.2.7. Market
The concept of exchange inevitably leads to the concept of the market. From an economic point of view, the market is the process in which buyers and sellers interact to determine the price and quantity of goods purchased and sold, currency circulation, sales transactions and services. From a marketer’s perspective, a market is a collection of people who are currently buying (actual buyers) and those who may buy a certain item (potential buyers).
Businesses cannot satisfy all the needs and desires of customers, so they will choose and focus on certain needs and desires of one or a group of customers, we call this the target market.
5. Marketing concept according to modern ideology (from the perspective of vlogger Giang Oi)
5.1. Marketing concept
Marketing concept of the American Marketing Association (AMA – America Marketing Associate) in 2017: “Marketing is the organization of activities in the process of creating, communicating, connecting and exchanging value to bring benefits in consumption (customers, partners, society, … in general)”.
“Marketing is the activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large” – AMA (2017).
In short, the seller brings benefits to the buyer and if this benefit is received by the buyer, the buyer will bring profit to the seller. To easily imagine marketing as an organization of specific activities, let’s look at a basic vegetable selling process as follows:
Figure 4: basic vegetable selling process
In this example, an ordinary vegetable seller at the market, although only doing the work of exchanging normal goods, hidden in it is the organization of different, more specific activities:
First, the vegetable seller identified her target customers: mothers and housewives with basic needs:
- I cook rice every day so I go to the market often.
- They care about health and beauty and will use more vegetables.
- The product is a cheap item, because the target customers are housewives so they will buy it immediately without having to consider too much about results and expectations.
Step two, after identifying the target customers, the vegetable seller begins to focus on the products:
- Grow clean vegetables.
- Spray water to make vegetables look fresh.
- Find clean premises suitable for the product.
Finally, the vegetable seller began to connect with her customers:
- Inform customers that delicious vegetables are available today.
- When customers come in to ask, besides selling vegetables, she can also talk about other things to make customers happy.
- Offering promotional programs (specifically, if you sell a whole bunch, you only need to sell for 9,000 VND to make a profit, so the vegetable seller offers the program “buy half a bunch for 5,000 VND and buy a whole bunch for 9,000 VND with the goal of Pepper can be sold as a whole bunch, not half a bunch).
In short, the purpose of marketing is to make customers feel satisfied and justified when making a purchase.
5.2. The values that customers receive
The value for the buyer (customer) will be the value provided (product, service, promotion, brand, etc.) after eliminating the cost of purchasing the product (cost of purchasing the product, time taken). Time spent listening to advice, effort shopping, etc.), is expressed by the formula:
Value to the shopper = Value provided – Cost of purchase
If we solve the problems that arise in the customer’s purchase cost, we will create perceived value for the customer, which is the customer’s emotional assessment of the value that they will receive relative to the cost. We have the formula:
Value to the shopper = Value provided + Perceived value
Similar to the general theory marketing concept (section 4.2.5), value provided is similar to basic benefits and perceived value is similar to additional benefits.
This is a subjective type of evaluation. If marketers understand customer psychology and behavior, they can create what appears to be the most value package with what appears to be the least purchase cost.
This means that customers are the center of all marketing activities (this is also the marketing premise of modern marketing school originating from 1960 to present).
Figure 5: diagram showing the types of value that customers receive
5.3. Customer’s concept
A customer’s concept is a certain thought or idea associated with the product that the customer chooses, for example:
- When mentioning diamonds, we immediately think of luxury, nobility, luxury, eternity,…
- When mentioning milk, we immediately think of children, tall, developed, dairy cows,…
In reality, that may not be the case, it’s just an idea in the customer’s mind. Marketers are tasked with exploiting those concepts based on the two most basic factors: needs and fears.
Each customer segment will have its own needs and fears, and each customer will have its own priorities for those needs and fears. Whatever priority the customer has, the marketer must deliver a valuable message corresponding to that customer’s priority.
Products are created to solve customers’ needs and fears, and marketing’s job is to help customers realize that.
However, fear-based marketing also has its dark side. Some marketers present fears that customers do not have or do not have and convince customers that they should have that fear.
Marketers will advertise products that customers believe will help them solve the fears they think they have when in fact the customer does not have that fear or that product is not capable of helping the customer. resolve that fear.
One of the deepest core fears that customers often exploit by marketers is loneliness.
– To be continued –
Thank you for reading my sharing, hopefully it has brought more or less useful value to you.
- Sky -